The economic measures Cambodia has taken against Thailand in response to the countries’ border dispute indicate the nation is a few steps ahead of its neighbour, both in terms of retaliation and its posture in negotiations, says an analyst.
“This is the first time Cambodia has responded to Thailand with immediate economic countermeasures,” said Aat Pisanwanich, an analyst in international economics and adviser on Asean affairs at Intelligence Research Consultant.
“Over the past decade, Cambodia has prepared for this moment by reducing its dependence on Thailand and shifting towards China, Vietnam, Malaysia and Singapore.”
According to Mr Aat, former Cambodian premier Hun Sen’s call for Cambodian workers to return home is expected to have a short-term impact on Thailand.
About 800,000 Cambodians, of whom 515,000 are officially registered, are employed in various sectors of the Thai economy, including agriculture, domestic work and cleaning.
However, if these workers go home, Cambodia will need to find jobs for them. If decent-paying jobs were available in Cambodia, they would have already returned, he said.
Mr Aat downplayed the impact of Cambodia’s ban on Thai films and dramas, noting digital platforms such as YouTube and Netflix make such content easily accessible.
In fact, the ban may increase frustration among Cambodian viewers, who may now incur higher internet costs to access the same content online.
As for a halt to imports of Thai products, he said this could affect Cambodia’s economy in the short term, roughly for two months, potentially leading to higher market prices.
However, 70% of the goods that Cambodia buys from Thailand can be substituted with imports from China and Vietnam.
Over the past decade, Cambodia reduced its reliance on Thailand, which used to be its top trading partner. Thailand now ranks third, after China and Vietnam.
On the trade front, Mr Aat highlighted key Thai imports from Cambodia, such as agricultural goods including the affordable kaew kamin mango, and branded clothing, auto parts, and electrical appliances produced in Cambodian border provinces, including Koh Kong and Serei Saophoan.
Any disruption in this supply chain could impact Thai industries such as mango processing and manufacturing, he said.
Internet and electricity
He also addressed Thai threats to cut off electricity or internet services to Cambodia.
“Such measures are unlikely to have much impact,” said Mr Aat.
“Cambodia can turn to Laos or Vietnam for electricity and access the internet through connections from Vietnam, Hong Kong and Malaysia.”
As a result, critical revenue-generating sectors such as online gambling and scam call centres — once estimated by the US to contribute up to 70% of Cambodia’s GDP — would remain largely unaffected. (Story continues below)
People wait behind a barricade at the Ban Khlong Luek border checkpoint in Aranyaprathet district of Sa Kaeo province on Saturday afternoon. (Sa Kaeo radio, Public Relations Department Facebook)
Migrants’ remittances important
Other commentators agreed that the threat to recall migrant workers and cease Thai imports will not amount to much.
Cambodian migrant workers need to earn a living and send back money to their families, said Tanit Sorat, vice-chairman of the Employers’ Confederation of Thai Trade and Industry.
“I don’t think Cambodian workers will return to their country where they cannot find jobs and may receive lower wages than working here,” he said.
Legal Cambodian migrant workers send up to 44 billion baht a year back to their families, he said.
“We understand what is happening. Hun Sen may want to get some political advantage with the help of nationalism,” said Mr Tanit.
Limits on border checkpoint hours, meanwhile, will affect transport and logistics, hitting goods prices and living costs mostly in Cambodia, not Thailand, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
Cambodia imports products from China, Vietnam and Laos, but many Thai products still hold a market share over 50%, thanks to consumers’ confidence, lower logistics costs and greater competitiveness.
“There is unlikely to be any immediate effect. However, if the ban continues for an extended period, Thai products may lose some market share in Cambodia,” said Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC).
According to the university’s Center for Economic and Business Forecasting, the call for a ban on Thai products is not expected to impact Thailand’s overall economy since those imported Thai products are essential items and cannot be substituted.
Last year, Thailand’s exports to Cambodia reached 300 billion baht, which included border trade exports valued at 141 billion baht.
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